The Belize Court of Appeals handed down a ruling on Friday, August 3rd, in an appeal filed by the British Caribbean Bank Limited (BCBL) against the Judgment of Justice Oswell Legall delivered on December 7th, 2010 and the related order dated January 26th, 2011 made in favour of the Hon. Attorney General and the Government of Belize.

The case dates back to the first Telemedia acquisition bill in 2009. On August 25, 2009 GOB enacted the Belize Telecommunications (Amendment) Act 2009. The Act made provisions for the Minister responsible for Telecommunications, with approval of the Minister of Finance, to acquire all property as he may consider necessary to take possession of and assume control over telecommunications as long as those assets are acquired for a public purpose. After the Belize Telecommunications (Amendment) Act, 2009 was passed into law, the Minister of Public Utilities issued Orders for the immediate acquisition of Belize Telemedia Limited. The Act made provisions for compensation to the former owners of the company.

On October 15th, 2009 the former owners of BTL made a claim for compensation in respect to the property nationalized. Then on October 21th, 2009 they challenged the constitutionality of the acquisition. Before that case was concluded, on May 4th, 2010, they went on to file a Notice of Arbitration at the London Court of International Arbitration (LCIA) pursuant to Article 8 of the UK-Belize Treaty 1982 (also known as the Bilateral Investment Treaty, BIT) on grounds of unfair, discriminatory and inequitable treatment of its nationalized assets. The Appellant also requested an order from the LCIA that Belize make full reparation to the Appellant in the form of damages or compensation in an amount to be determined by the Tribunal.

The respondents, attorneys for the Governor General, filed for an injunction to prevent BCBL from taking the case abroad before bringing it through the Courts of Belize. Justice Oswell Legall granted the injunction preventing the former owners of Telemedia from “taking any or any further steps in the continuation or prosecution of the arbitration proceedings” until “the hearing and determination of the local claim for compensation made on October 15th, 2009 by the (appellant) and until any subsequent proceedings in the local courts in relation to the said local claims are heard and determined.”

President of the Belize Court of Appeals, Justice Sosa, presided over the case along with Justices Mendes and Pollard. Justice Sosa and Justice Mendez overruled Justice Legall’s ruling but only in regard to his seemingly indefinite interlocutory injunction. Justice Sosa said that Justice Legall “erred egregiously when he omitted to grant an injunction to last only until trial or further order”. However, it was not a win for BCBL as the court opted to “exercise its own original discretion in the matter”. In his ruling, Justice Sosa said that there are serious issues for trial involved in the case such as “whether the continuation of the arbitration by the appellant would be vexatious or oppressive while the constitutional proceedings and the proceedings to determine the legality of the BTL facility and mortgage are ongoing”. Other serious issues for trial include whether the BIT is part of the laws of Belize, and whether it can be relied upon by the appellant, and whether the court below is the proper forum for the determination of all claims to compensation for expropriation of the appellant’s property under the 2011 Acquisition Act. Justice Sosa agreed with the orders proposed by Justice Mendes to affirm the order of Justice Legall by approving the interlocutory injunction but limited it to a time period necessary for completion of the trial of the substantive claims in the court below. It is a very technical ruling that is basically ordering BCBL to settle its disputes in Belize before proceeding to arbitration.